When the auditor concludes that there is substantial doubt about the entity's ability to continue as a going concern, and this has been adequately disclosed in the financial statements, the appropriate audit report is:
A) an adverse opinion with an emphasis of matter section.
B) a qualified opinion with an emphasis of matter section.
C) an unmodified opinion with no emphasis of matter section.
D) an unmodified opinion with an emphasis of matter section.

Question

Quizplus · Accepted Answer

When the auditor concludes that there is substantial doubt about the entity's ability to continue as a going concern, and this has been adequately disclosed in the financial statements, the appropriate audit report is an unmodified opinion with an emphasis of matter section. This is because an unmodified opinion indicates that the financial statements are fairly presented in all material respects, while the emphasis of matter section draws the user's attention to management's uncertainty about the entity's ability to continue as a going concern. This provides additional information to the users of the financial statements without modifying the auditor's opinion on the financial statements as a whole.

When the Auditor Concludes That There Is Substantial Doubt About